What phrase refers to the body of laws and customs governing the relationship between principal and agent?

• A. Law of agency
• B. Agent-principal relationship
• C. Express agency
• D. Special agency

Answer: (A)

The law of agency is the body of laws and customs that governs how principals and agents relate to each other. It sets out who can act for whom, what authority the agent has, and how that authority can be created, limited, or terminated. It also defines duties the agent owes to the principal (such as loyalty, obedience, and accounting) and the principal’s responsibilities, plus the consequences if either side breaches those duties.

The other terms describe the relationship itself or particular forms of authority rather than the overarching legal framework: the agent-principal relationship denotes the relationship, express agency refers to authority granted explicitly (in writing or orally), and special agency indicates a limited, task-specific scope.